They Think It's All Over....

[TheCountOfNowhere]

So many threads I open, so many articles I read, so many property-shows I catch a bit of on TV, so many links I open from forums to houses up for sale on Righmove, to stock-prices...

Makes me feel so disorientated like Kyle Reese, the resistance fighter in Terminator 1.. his first question being. "What day is it- what year?"

Because it all seems worse than peak 2005-07 madness... I have to check the date of threads and links immediately.. always shocked its the current time.

Rather than there's been hundreds of billions of QE and rates are floored because there's so much debt in the system... and HTB2 looks very much like trying to get younger people to overpay for older people's housing + has the secondary effect of making EAs and sellers think they can sell property for more + draws out those who will.

I'm with you on that. I have to pinch myself sometimes. The last 6 months have been like 2007 on steroids. Saying that locally, the land registry is still only saying August 2004 prices...so something somewhere isn't quite right. Maybe we will see that shoot up soon.

if we have Chinese foreign nationals buying up property in the UK then it should be stopped. If these "sales" are some kind of concerted marketing offensive by the local agents, they should be stopped, if this is basedo n the hope of finding chains propped up by HTB2 then HTB2 should be stopped.

Will it be stopped....no....the reason....I can only guess as stupidity of corruption.

[tomandlu]

I'm with you on that. I have to pinch myself sometimes. The last 6 months have been like 2007 on steroids.

Is Dances With Sheeple still in denial?

[snowflux]

Could all be a last hurrah as the banks dump FLS money.

Could be people fed up with waiting.

Could be public perception of reality.

It is a mystery where the money is coming from.

Presumably the money is coming from banks lending out large sums at interest rates kept artificially low by the government through schemes such as Help to Buy (plus, in London, rich foreigners seeking a safe-ish haven for their fortunes). I'm no economist, but given that the last time the plates wobbled it nearly trashed the banks, I'm a little worried that when the plates do eventually come crashing down, it'll trash the pound.

[TheCountOfNowhere]

Presumably the money is coming from banks lending out large sums at interest rates kept artificially low by the government through schemes such as Help to Buy (plus, in London, rich foreigners seeking a safe-ish haven for their fortunes). I'm no economist, but given that the last time the plates wobbled it nearly trashed the banks, I'm a little worried that when the plates do eventually come crashing down, it'll trash the pound.

Im tending to think that the FLS scheme last year gave prices and sales a boost, the estate agents think we have returned to normal and are pushing up prices based on this.

However, FLS is no more and the impact of it's withdrawal has still to filter through and with asking prices shooting up 20% how many young people are realistically going to buy into the HTB2 scheme.

I said near the end of last year most people had already missed the boat when it came to selling with the help of FLS. Time will tell.

The word is clearly out that now is the time to sell/trade up/buy you can clearly see that from the SSTC listings for that area.....I can only hope that boat they missed is about to well and truly hit the iceberg.

Sentiment might turn quickly again if all these "sales" turn out never to materialise.

Edited March 12, 2014 by TheCountOfNowhere

[wonderpup]

Also institutions dont 'print money'

And the contents of your bank account are not money either.

Most of the 'money' we use is bank credit- and guess where bank credit originates?

So given that bank credit is what we use for money most of the time, banks do indeed 'print money' to the degree that they can and do pluck bank credit out of thin air by collateralizing a borrowers signature on a loan agreement.

Unless you think that the money you borrowed today was the same money I deposited yesterday? If so does that mean I can't have my money tomorrow?

[Bloo Loo]

And the contents of your bank account are not money either.

Most of the 'money' we use is bank credit- and guess where bank credit originates?

So given that bank credit is what we use for money most of the time, banks do indeed 'print money' to the degree that they can and do pluck bank credit out of thin air by collateralizing a borrowers signature on a loan agreement.

Unless you think that the money you borrowed today was the same money I deposited yesterday? If so does that mean I can't have my money tomorrow?

whilst that is essentially correct, a bank needs actual BoE credit ( the product they trade in) to settle any movements...they just hope not everyone wants settlement the same day.

if they could just print money, there would never be a credit crunch or a bank failure....although the way they have been bailed out they might as well have not bothered with prudence at all.

[200p]

I looked last night and almost everything above £500K has gone SSTC.

----

I am unlikely to buy a house at these or any prices but on face value...many people SUDDENLY are.

If one can't play at the high stakes table, it is time to play elsewhere...

[TheCountOfNowhere]

Can you give me your stats first as "almost all" is somewhat subjective ?

Ok, here you go:

Total up for sale ( not SSTC ) :47

Total up for sale ( SSTC & not SSTC ) :84

Therefore total SSTC = 84-47 = 37.

As I said. Almost all.....

I my defense it used to be 10.

[Bland Unsight]

Bank affordability criteria are something of a smoke screen. Typically people buy houses as a couple, and are assessed on their joint income. But in practice, the woman usually either drops out of the workforce to have babies, or childcare ends up consuming most of her salary. So in practice, most mortgages end up being paid based on a single income, even though 'affordability' is initially assessed on joint income

Also institutions dont 'print money'

When 40% of mortgages are interest only and up to 7% were in some kind of forbearance at the time of the FSA MMR, I remain to be convinced that lots of late bubble mortgages are being 'paid' at all. They're barely having their interest serviced.

Apologies for cross-posting, and H/T to FreeTrader, but it appears that you are at odds with the Bank of England on this point, but hey, what do they know about who is responsible for money creation...linky-linky

Too early to call troll on this? My spider senses are tingling.

[Confounded]

People wheel out that graph every couple of months or so, along with some anecdotal evidence of where we are supposed to be along the curve.

"Welcome to the Fear Phase" is the one I remember most.

A great thread that one :-)

They were the days, things were falling into place and even into 2011 it looked on track, the rest is now unfortunately history. I let it run it coarse but with it's failure to materialise at that point (the fear phase) I had to initiate plan B and admit defeat in the face of the numerous supports put in place and continuing to put in place.

Edited March 12, 2014 by Confounded

[zugzwang]

Easy to lose sight of but FLS/HtB/Right to Buy... even taken together these market defying subsidies are marginal drivers of change when set against the monstrous scale of Osborne's borrowing. And as long as he can continue to borrow £120bn/yr cheaply enough to hold the Potemkin facade together then the UK economy will appear to be superficially improved. The moment he can't? We win.

As for the US. Does this look like 'escape' velocity? Ahead of the UK, sure, but they still have years even decades of deleveraging left to do.

[okaycuckoo]

Easy to lose sight of but FLS/HtB/Right to Buy... even taken together these market defying subsidies are marginal drivers of change when set against the monstrous scale of Osborne's borrowing. And as long as he can continue to borrow £120bn/yr cheaply enough to hold the Potemkin facade together then the UK economy will appear to be superficially improved. The moment he can't? We win.

As for the US. Does this look like 'escape' velocity? Ahead of the UK, sure, but they still have years even decades of deleveraging left to do.

For sure - looks like an awesome fu*ck up by the treasury.

So awesome that I hope I'm wrong - kind of.

[Odysseus]

Northampton is now considered prime London commuter territory as it's just under one hour into Euston.

Lots of young professionals are now selling their first properties (1/2 bed flats in London) for record amounts, think £400K-750K to move out to the shires and settle down.

This is the ripple effect of London in action.

[winkie]

Northampton is now considered prime London commuter territory as it's just under one hour into Euston.

Lots of young professionals are now selling their first properties (1/2 bed flats in London) for record amounts, think £400K-750K to move out to the shires and settle down.

This is the ripple effect of London in action.

[dances with sheeple]

I will certainly update the thread when I see any momvement.

ON a brighter note, some top end stuff (that I drive past frequently) went SSTC in November, it's now march and it's still SSTC.

Drove past a property in Edinburgh, nothing special just a cottage on the South side of the city in a little row of similar cottage style houses, workmate in the taxi with me supporting a disabled guy said "That has been for sale since I joined this team" I said "How long is that again?", "Three years" he said.

Edited March 13, 2014 by dances with sheeple

[dances with sheeple]

And we wonder why we're in so much trouble...

So, let me ask you, which is more of a problem for the banking industry? Someone defaulting on a 500K mortgage, or the same person defaulting on a 100K mortgage? As a follow-up question, in what way does it help anyone to keep lending more and more money against houses, thus forcing up the price?

You say that house prices are not linked to earnings (correct), but you neglect to mention that they are linked to credit.

It was helpful in the days when they were selling on the loans and collecting big bonus for doing so, it is not helpful now except to pump the market a bit to keep those with the 500k+ loans from throwing in the towel, and blowing up the banks (again)

[Neverwhere]

Its not about house prices, its a general illustration on the anatomy of a financial bubble.

The 1990s bubble didnt conform to the pattern as there was no return to normal...it just crashed.

This makes me wonder whether, if the pattern does play out on this occasion, the mid-90s crash might just have been the bear trap to our current mega-bubble?

So Take off in the late 70s; First sell off in the early 90s, with the Bear trap bottoming out in '95; Media attention in the early 00s ramping to "New Paradigm"! in 2007; Denial in '08 and the resultant Bull trap continuing to present (though now, in many areas, clearly in the upswing stage towards Return to "normal")?

It seems logical (to me at least, feel free to shoot me down everyone) that a comparatively undertraded asset class such as housing would take a much longer time to go through the normal phases of a bubble than regularly traded assets such as stocks, hence the current bubble's immense and seemingly neverending nature and calls for a market top so far proving incorrect because they've been working on the wrong timescale?

http://moneyweek.com/uk-house-prices-will-plummet-look-at-this-scary-chart-14664/

[Bland Unsight]

And we wonder why we're in so much trouble...

So, let me ask you, which is more of a problem for the banking industry? Someone defaulting on a 500K mortgage, or the same person defaulting on a 100K mortgage? As a follow-up question, in what way does it help anyone to keep lending more and more money against houses, thus forcing up the price?

You say that house prices are not linked to earnings (correct), but you neglect to mention that they are linked to credit.

Not a direct response to you tomandlu as you may be playing Devil's Advocate, but the obvious answer is that neither are a problem provided house prices go up...

Now, could someone remind me, what was the epicentre of the global financial crisis? Somebody said something about real estate (commercial and residential) but I forget the details, I mean it's been nearly 6 six years. I can't be expected to remember everything.

Does anyone else share my anxiety that destroying the money in order to save the banks is not much of a prospect for long term stability and wealth generation?

Edited March 14, 2014 by ChairmanOfTheBored

[Bland Unsight]

This makes me wonder whether, if the pattern does play out on this occasion, the mid-90s crash might just have been the bear trap to our current mega-bubble?

You get my vote.

[Venger]

And we wonder why we're in so much trouble...

So, let me ask you, which is more of a problem for the banking industry? Someone defaulting on a 500K mortgage, or the same person defaulting on a 100K mortgage? As a follow-up question, in what way does it help anyone to keep lending more and more money against houses, thus forcing up the price?

You say that house prices are not linked to earnings (correct), but you neglect to mention that they are linked to credit.

It helps the borrowers who want to borrow ever higher sums to pay higher prices.

In the mind-view that more people will pay higher prices still for similar homes and make their own home worth more. Who want that outcome, even if it means any trade up house in the future is even more expensive. And it helps all those that think renting is dead money.

There's so many variables that many hpcers have no concept of, because it goes against their own beliefs, but is nevertheless true. Including how some people find it a thrill to have a huge mortgage, because it's positive affirmation of their self-worth in society.

It's in the tone of so much I read and hear and see every single day, for years. You and Yours intro of the other day.

It's considered very rude these days to mention how much your London property is worth. But now that the market is ripping away, we wondered if Rosie Millard prospered from her property gambles in the end.

Mwhahahaha you can hear the pride. And it also shows the accepted attitude of the past that many owners have had... who bragged about how much their homes were worth/had gone up in value. It's just they've perhaps become more polite about it, as house prices "ripping" and zooming further ahead in value, year-on-year, and they know all the problems are being dumped on younger non-owners. (Let's hope they never complain, they're probably thinking).

The banks lend, but their have long been buyers who wanted the help of ever bigger mortgages, given their own views and decisions on the market. When market tries to correct, you then get the bleeding hearts offering all the excuses for how buyers/huge debtors are innocent... "they didn't want the insecurity of renting ect ect"... (and that's why they paid 300% more than you think their house is worth.)

Edited March 15, 2014 by Venger

[bambam]

Northampton is now considered prime London commuter territory as it's just under one hour into Euston.

Lots of young professionals are now selling their first properties (1/2 bed flats in London) for record amounts, think £400K-750K to move out to the shires and settle down.

This is the ripple effect of London in action.

What like this?

http://www.mumsnet.com/Talk/property/2025249-Thinking-of-moving-to-Leicester-from-Northampton-any-suggestions

It's what I would call 'sub-prime commuter territory'. Overlong commute, undesirable area, £500+/month for a season ticket.

[Neverwhere]

What like this?

http://www.mumsnet.c...any-suggestions

It's what I would call 'sub-prime commuter territory'. Overlong commute, undesirable area, £500+/month for a season ticket.

Under one hour to Euston is better than many intra-London commutes!

[Executive Sadman]

What like this?

http://www.mumsnet.com/Talk/property/2025249-Thinking-of-moving-to-Leicester-from-Northampton-any-suggestions

It's what I would call 'sub-prime commuter territory'. Overlong commute, undesirable area, £500+/month for a season ticket.

Yes. I can understand Cambridge, Oxford, Brighton for professionals looking to relocate out of London, but Northampton?

Its not got much in the way of museums, culture or anything. A bit grim really. Maybe some country houses in rural northants, but cant see many londoners attracted to Northampton itself.

[Bloo Loo]

It helps the borrowers who want to borrow ever higher sums to pay higher prices.

In the mind-view that more people will pay higher prices still for similar homes and make their own home worth more. Who want that outcome, even if it means any trade up house in the future is even more expensive. And it helps all those that think renting is dead money.

There's so many variables that many hpcers have no concept of, because it goes against their own beliefs, but is nevertheless true. Including how some people find it a thrill to have a huge mortgage, because it's positive affirmation of their self-worth in society.

It's in the tone of so much I read and hear and see every single day, for years. You and Yours intro of the other day.

Mwhahahaha you can hear the pride. And it also shows the accepted attitude of the past that many owners have had... who bragged about how much their homes were worth/had gone up in value. It's just they've perhaps become more polite about it, as house prices "ripping" and zooming further ahead in value, year-on-year, and they know all the problems are being dumped on younger non-owners. (Let's hope they never complain, they're probably thinking).

The banks lend, but their have long been buyers who wanted the help of ever bigger mortgages, given their own views and decisions on the market. When market tries to correct, you then get the bleeding hearts offering all the excuses for how buyers/huge debtors are innocent... "they didn't want the insecurity of renting ect ect"... (and that's why they paid 300% more than you think their house is worth.)

yes...having a huge mortgage is the working mans trip to the Investment markets...it shows he understands things, has control and enough wizzo to "see" the sense of taking on this plan for the future...it means standing on ones own two feet, it means taking care of yourself for your lifetime, it means you are covered when times are changing and your home is your pension.

So many false justifications for a World that is 100% financialised....a justification that is implanted in every piece or related sales blurb from mortgages, to credit cards and personal loans, BTL and even which Politician to vote for.

It is a truism that money is the root of all evil...and evil prospers by deception, and Financialisation is the biggest deception being carried out minute by minute throughout the World today. That borrowing money just to live is the way to live unbeholdent to anyone, that it is the path to freedom ( peace of mind, financial freedom and independence), that it is right and good to get involved.

You see it in every banking advert, and more of every thing for YOU is in every Politicians schpeal.. Its all a lie, but few see it.

[steve99]

Under one hour to Euston is better than many intra-London commutes!

Yep, get out of bed at 5.30, leave for station at 6.15, get on your train at 6.45, get to Euston (after standing all the way?, or at least very cramped on modern trains) at 7.45 change to underground then get to work at say 8.30'ish giving you maybe a 15-30min space for delays etc. Repeat on the way home, get home at 8pm. Burnt out and buggered by the time you are 40 if you are of the right stuff, worse if not.